Collection Agents

Discussion in 'Lawn Mowing' started by AGG Lawn Maintenance, Feb 12, 2003.

  1. AGG Lawn Maintenance

    AGG Lawn Maintenance LawnSite Senior Member
    from Elberon
    Posts: 422

    Year after year I get tired of writing off customer debts. I have contracts with most customers. Still every once and a while someone still doesn't pay. The whole legal thing takes forever. Plus I find myself having less and less time to fight people in court.
    My lawyer tells me to just write it off. I guess my whole problem is that I take it personal. I have a family. I feel I should take it personal when your taking food out of our mouths. I bust my @$$. You guys feel my pain? Sorry I got side tracked. My question is do any of you guys use a collection company and if so which one? Travis:blob2:
     
  2. They are the ones who will make the money out of the deal.

    Better off taking the tax write off than to use them.

    Watch you overdue payments better and don't let them get in the whole that much to effect you.
     
  3. bruces

    bruces LawnSite Senior Member
    Posts: 648

    The collections people get a hefty percentage, but if you can't collect it at all and they can, you are still better off with whatever they can get for you.

    You will have some cash and as LGF said, a writeoff for the amount not collected (if you pay tax on the accrual basis).

    If the amount is sizable, I would probably turn it over for collection.
     
  4. xpnd

    xpnd LawnSite Senior Member
    Posts: 378

    As I was writing my service agreement I lifted this almost verbatim from a credit card application. Who else knows the most about collecting unsecured debt and not lose out. This way you have a better chance of getting all of what is owed you because the collection agency simply tacks on there fees to your amount.

    COLLECTION CHARGES: If the customer’s account is in default, the customer agrees to pay all collection charges we actually incur in the collection of the amounts that you owe under this agreement (including the charges of any collection agency to which we may refer your account). In the event the account is referred to an attorney, the customer agrees to pay all charges and expenses, including reasonable attorney’s charges and court costs, to the extent permitted by actual law.
     
  5. gvlawncare

    gvlawncare LawnSite Member
    Posts: 25

    Last year I had one bad account. :angry: You should have a contract signed, even if on a per mow basis. In that contract, you should have a clause stating "any attorney fees, court costs, or other costs incurred in the collection of delinquent accounts shall be paid by the customer. If payment of invoices is not current, the company may suspend performing further work." This works for me. I had to go to small claims court and it really wasn't a hassle at all. No $100/hr, lawyer and if you are in the right, there will be no problem. Even if you are awarded the money you are owed, getting paid could be a different story though. There is a U.S. marshalls office in the same building as the court, and if you talk to one of the officers, they would probably be more than happy to take the court order to the person that owes you money and make them pay on their off hours for a few bucks. (You'll have to foot the bill for that!!) 40 or 50 bucks to make sure you get what is owed is worth it to me. Just my 2 cents. MATT
     
  6. xpnd

    xpnd LawnSite Senior Member
    Posts: 378

    If you use small claims court and receive a default judgement or the defendant does not pay as ordered by the court, a request can be made to the court to file an "Abstract of Judgement." Fancy words for a mechanics lien however this lien collect 10% interest per year. No title company will touch a property with such an attachment and you'll really screw up the guys credit rating. Next time he goes to get a car loan, it will be sorry you're not approved. Right now I have one that is racking up a $75.00 interest fee every year. Unfortunately this sucker can pay cash money for just about everything, but when he sells his house, he will finally realize I wasn't some stupid lawn jockey. He even ignored the court sumons.
     
  7. Organix

    Organix LawnSite Member
    Posts: 113

    I was going to mention a Mechanic's Lien. I don't know what the law is in each state, but I am pretty sure in my state, that basically anyone can file one. I don't think you even need a judgment. It cost like 10 bux to file in my county. I thought about doing it for a couple people that never paid but found it had to be filed within like 60 days. Check out the law's in your state, it may be a viable alternative to court. Perhaps even a letter explaining what it is would get customer's to pay. That will be my future tact.
     
  8. baddboygeorge

    baddboygeorge LawnSite Bronze Member
    Posts: 1,249

    ya want to solve your head aches property leins they work great . they cant do anything with the property until they pay ya .try it it works wonders !!
     
  9. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    I make several visits to the house and send letters asking for my money first. Then I wait a couple of months (trying to be as nice as possible). If they still won't pay and they show that they have no intention of paying I get this company to attempt to collect the money.

    www.olddebts.com

    They do not guarantee collection but they will send them 4 collection letters, chase them wherever they move to and report the bad debt to the credit reporting agencies for about $20.00. It works for me. Usually it's the credit agencies reporting that gets them to pay.
     
  10. Gravely_Man

    Gravely_Man LawnSite Silver Member
    Posts: 2,076

    Thank you very much for the info Richard. I have been following this thread with interest. I have used the going to court route a few times with great results but I wanted to find something that will take less of my time.


    Gravely_Man
     

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